This article is for reference only - things
have changed
since it was written but it is here to perhaps explain more of the
history of our insurance industry up until 2014 - JS
SELF-EMPLOYED AND THE LAWS GOVERNING MEDICAL COVERAGE

People often ask why a carrier won't cover them, and what are they
to
do when they turned down? Why do insurance carriers charge so much?
What
if they don't care about covering a certain preexisting health problem?
What if the cancer was over five years ago, the heart attack more than
15 years ago? Why, what if, why not....

The insurance industry is just that: an industry.Private
business. Companies who make a profit by covering people when they
are healthy - or in reasonably good health - and "betting" that those
people
won't get sick and require the carrier to pay out more in their behalf
than they collect. It's like any other business. If I own an appliance
store, and I pay $200 for a Brand X washer, and sell it for $300, then
I make a $100 profit. If I put it on sale for $250, I make a $50
profit.
But if Brand X just isn't popular, I may mark it down to $175 and
take a loss. If I have to do that often, I will go out of
business
(or have to raise the prices on everything else to compensate)!
Insurance is no different: premiums collected must exceed claims in
order to stay in business. As of 2011, 80% of every dollar collected by
cariers must be paid out for claims. The Congressional Budget Office
(CBO) has indicated that the average health carrier makes a 5% overall
profit. The average self-employed person could not live on a 5% profit.

Sometimes insurance becomes Brand X at its worst, and carriers do
take
a loss. Hopefully, there are enough healthy people still on that
insurance
company's plan to carry the cost of the claims of the not-so-healthy.
Often
there are so many people with claims that the carrier has no
choice
but to raise its rates to compensate. When it does, depending on how
that
carrier rates, it will do so if it raises those rates for all customers
in specific age bracket/geographic categories (for example, everyone in
the age 30-34 age bracket in Pima County on that same plan) - this is
called
"composite rating." This method allows the carrier to spread the risk
across
a greater group of people and therefor not have any one customer get
hit
with a major rate increase. Very few carriers "experience rate" - this
is where a carrier can raise the client based on his or her claims and
not spread it across a greater group - these carriers can drop a 75%
rate
hike on less healthy customers in one fell swoop. (I personally work
with
none of these types of carriers and am not familiar with any in AZ who
still do this.) Fair to the healthier customer - yes.
But how about to the customer who had a major heart attack and maybe
can't
work as much (if at all) and thereby doesn't earn as much income as he
did before?

We as a nation have been used to working for large companies and
obtaining
group insurance, which didn't seem to care how healthy we were. And
when
we left that large company, we found that perhaps, through a program
called
COBRA, we could keep our benefits another 18 months. So many people
didn't
bother to start looking for insurance on their own until the COBRA was
about to expire. And then they found that no one wanted to cover them
because
of medical conditions which occurred while they were on COBRA - until a
law passed in 1996, called HIPAA (very expensive). Or if they could get
coverage, they were often charged higher rates for that coverage.

We encourage everyone who leaves a group policy to obtain private
health
insurance for themselves as quickly as possible. There are two reasons
for this. First, because the company was probably paying a good portion
of that employee's premium every month, and because group insurance
tends
to be more costly than insurance obtained individually, the premiums
are
usually pretty expensive on COBRA and individual insurance will be less
expensive - 95% of the time. Second - and more important - if a
serious
problem should occur while someone is
covered by COBRA, then they have
a
preexisting condition when COBRA goes away and either have no coverage
or will have very expensive coverage (up to four times more
than they
normally would).

I hear customers say how grateful they were to have had COBRA, that
the spouse had only been on it six months when he had a heart attack.
But
12 months later, when COBRA ends, that man isn't able to obtain
coverage.
And the couple is frustrated because no one advised them this could
happen.
Had that couple taken a private policy at the end of his employment, no
one could take that coverage away, regardless of the number of heart
attacks
he had. Individual insurance doesn't have a shelf life (unless the
company
goes out of business, which can - but rarely does - happen).

What we have found is that many people don't want to be bothered
with
taking a look at insurance if COBRA is available. They don't believe
anything
is going to happen to them in the next 18 months. Consider: no one who
ever had a heart attack or stroke, or who was diagnosed with diabetes,
MS or cancer, ever planned it.

It has been estimated that by the year 2012, more than 55% of
the population will be employed in a business of their own. That means
a lot of people who have been on group health insurance will be seeking
private coverage.

In the last 19 years, our agency has covered more self-employed
people
than any other group. Perhaps that's because - as agents - we, too, are
self-employed, and recognize the need for services which specifically
address
our health interests.

Without a doubt, the self-employed are the easiest to provide health
insurance. At least, in Arizona. And it has nothing to do with
illegally
posted signs proclaiming cheap coverage for those people (those
carriers
will decline people with preexisting conditions just like any other
carrier).
There are several comprehensive plans available which have virtually no
underwriting requirements - preexisting conditions and all, we have
placed
better than 95% of the self-employed people who have called our office,
and at reasonable competitive rates.

In assisting a customer to secure a good health plan, the first
thing
we do is encourage everyone to obtain a copy of their health records.
It
is amazing how many medical files contain incorrect or out-dated
information
(over 20%). One of my earliest customers, a gentleman in his
early
50's, was refused coverage because his records showed he had cancer of
the uterus. And I've had more than one customer turned down because the
records of someone with the same or a similar name got mixed up in
their
file (or Tom Smith, Sr's file was sent to the carrier instead of that
of
Tom Smith, Jr). We have customers swear that their doctor told them a
certain
condition would not recur, it was "cured" and should never be a
problem....
then they get their records and see that what the doctor wrote and what
he told them were not exactly the same.

Know what is in your medical file. These are your medical
records;
get a copy. And if you need to provide a carrier with a copy, make an
extra
set.

Individual insurance is not as expensive as many people
believe.

We work with several plans which will cover people with health
problems.
And, if you are self-employed and healthy, you have many choices. If
you
are self-employed and have health problems, you have less options - but
still very good ones.

Our agency works with the healthy and the not-so-healthy, the
self-employed
and the otherwise-employed. We try to find plans which will work for
everyone
who calls. It is not easy to place everyone with whom we talk, but we
try.
If we hit a wall, we refer to the social agencies who work with
various
medical conditions and who may be able to offer assistance of some
sort.
Sometimes we simply act as a referral source. Whatever it takes.

"Twelve Questions to Ask Your Agent" is available on this
website. If a
customer
just needs to find out their options, we will try to assist them. If
they're
looking for dental, or optical, or need assistance with prescriptions,
travel coverage, Medicare - it is all available. And if they just
want a quote over the phone, that's fine, too.

The self-employed are our most easily-placed customer. You DO
have choices, and you CAN get coverage.